J.K. SYNTHETICS LTD. Vs. CCE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. J.K. Synthetics, is whether D.M.T. recovered by re -cycling of Polyster Fibre waste and Polyster Yarn waste is exigible to excise duty.

(2.) Shri M.K. Sharma, Learned Advocate, submitted that the Appellants manufacture Polyster Fabric for which the principel raw material is Dimethyl Terephthalate (DMT); that during the course of manufacture of Polyster Fibre certain wastes are generated which are re -cycled and DMT is obtained in molten from known as recovered DMT; that DMT so recovered is in the molten form having temperature over 250 degree Celsius and as such is not capable of bought or sold in the said form; that accordingly recovered DMT is not goods attracting levy of Central Excise duty in view of the judgment of the Supreme Court in the case of Bhor Industries Ltd. vs. CCE, 1989 (40) ELT 280 (SC) wherein it has been held that the marketability is an essential condition for excise ability; that this Tribunal also in the case of LML Ltd. vs. CCE, 1992 ( 59) ELT 82 has held that the process of De -polymerisation of Nylon Polymer waste to obtain caprolactum amounts to re -cycling and that caprolactum in moten form is not marketable; that accordingly recovered DMT having similar process and form as of re -cycling of caprolactum is not goods attracting Central Excise duty. Reliance has also been placed on the decision in the case of UOI VS. Delhi Cloth and General Mills Ltd., 1997 ((2) ELT 315 (SC) and Jagjit Cotton Textile Mills Ltd. vs. CCE, 1990 (50) ELT 379.

(3.) Countering the arguments Shri V. Valte, learned SDR, submitted that DM'I' in solid form is being bought and sold in the market; that if the Appellants does not have DMT in solid form and keeps the same in molten form it should not make it non marketable; that it is not a disputed fact that the Appellants have DMT Recovery Plant in which the Fibre/Yarn waste is re -cycled and DMT in molten form is obtained; that the Recovered DMT is used as DMT purchased by them from the market; that it is thus apparent that the Recovered DMT has all the essential ingredient required to qualify an item as goods under the Central Excise Act; the learned SDR relied upon the decision in the case of UOI vs. Sonic Electrochem (P) Ltd., 2002 (145) ELT 274 (S.C.) wherein the Supreme Court has held that "it is difficult to lay down a precise test to determine marketability of an article. The essence of marketability is neither in the form nor in the shape or condition in which the manufactured articles are to be found, it is the commercial identity of the articles known to the market for being bought and sold. The fact that the product in question is generally being bought and sold or has no demand in the market would be irrelevant". He, further, contended that the similar views were held by the Supreme Court in the case of Andhra Pradesh State Electricity Board vs. CCE, Hyderabad, 1994 (70) ELT 3 (SC) wherein it has been held that "So long as the goods are marketable they are goods for the purpose of Section 3. It is also not necessary that the goods in question should be generally available in the market......The marketability of articles does not depend upon the number of process nor is market confined to the territorial limits of this country He also mentioned that the goods which are captively consumed and are not brought to the market for being bought and sold have been held to be liable to duty. Reliance has been placed on the decision in the case of Assam Valley Plywood Pvt. Ltd. vs. UOI, 1996 (83) ELT 494 (SC). He, therefore, submitted that molten metal, which is entirely consumed captively by the Appellants in the manufacture of fibre/yarn, is liable to Excise duty.